Airlines reopen bookings but avoid getting stuck with credit shells

Most private airlines, including Indigo, Vistara and GoAir, have started taking bookings starting 1 June despite the Directorate General of Civil Aviation (DGCA) asking airlines to refrain from selling tickets until further notice. National carrier Air India, however, has not opened for bookings yet.

All domestic and international flights were suspended starting 25 March and though lockdown four offers considerable relaxations in most states, air travel is still suspended with no clarity on when it is expected to resume. Should you still go ahead and book flight tickets now?

The present conundrum

Note that most people who’d made bookings during the lockdown have not received any refunds on cancellation of flight tickets. They’ve either been given the option of rescheduling or taking credit shells that can be used for future bookings which could come with a set of restrictions. Sudhakar Reddy, president, Air Passengers’ Association of India (APAI), said that according to reports, a huge sum of money is stuck with airlines for all the flights that were cancelled during the extended lockdown in the wake of covid-19. “As per the Centre for Asia Pacific Aviation (CAPA) India, ₹3,700 crore is stuck with both domestic and international flights. This is between the midnight of 24 March and the first half of lockdown three," said Reddy.

Despite the civil aviation ministry asking airlines to refund cash for cancellations during the lockdown, most airlines have only offered credit shells (rescheduling is an option most people don’t want). “When people book air tickets they have a purpose. This purpose may or may not arise later. They may or may not want to visit the same place and take the same flight. Therefore, they might invariably be stuck with the credit shells. In case they book the tickets later and the airfares are higher, they will have to pay for the difference between the credit shell and the value of the ticket," said Reddy.

A couple of travel portals Mint spoke with said that for all refunds, online travel agencies (OTAs) follow airline policies and every airline has a different policy. OTAs usually wait for airlines to communicate and the same message is passed on to the customer. In case of cash refunds, OTAs wait for the airlines to release funds before they can deposit the same in the customer’s account. Also, a credit shell from one travel portal cannot be used to make bookings through another.

Should you book?

Akanksha Anshu, co-founder and managing director, Refundme.in, a company providing legal services for air passengers, said there is no directive on when flights can restart and for airlines, taking in new bookings already is only a way to generate revenue. “Please wait for the ministry guidelines for clarity before booking flight tickets. Otherwise, there is no way of getting your money back. You will get money in the form of a credit shell or extended timelines," said Anshu.

If you still prefer to book, ensure you do it directly through the airline’s website. This will save you from additional trouble in case the flight gets cancelled due to a further extension of the lockdown. It is important to understand the scenario at both the cities (city of departure and city of arrival) because if the number of covid-19 cases peak, there’s a possibility of sudden shutting down of operations which will result in cancellation of flights.

Also, if your booking falls during the lockdown and the flight is not operating, it’s advisable to not cancel the booking and allow the airline to do it for you. “There is legal technicality involved here. If the passenger cancels the ticket, the airline or the travel agency reserves the right to deduct the cancellation charges but if they fail to provide the service and the ticket is cancelled due to suspension of the flight, then the airline or OTA has to give a full refund and in this case, no cancellation charges are applicable," said Anshu.

Also, if you think buying a travel insurance policy while making the flight booking will save you from losing or blocking your money with the airline in case of flight cancellation, then you could be mistaken. “We will sell travel insurance policies but the policy will kick in only after the civil aviation gives its nod for flight operations," said Milind Kolhe, chief underwriting and reinsurance officer, Bharti AXA General Insurance.

Unless there’s a pressing need, it’s advisable to not jump the gun and book tickets just yet. Unnecessary travel should be avoided given the pace at which the virus is spreading in the country. “Due to suspension of flights, already most travellers are having a credit shell which they can use in the next 12 months. Booking another ticket now is not a good idea. It makes sense to wait for two more weeks at least and book spot tickets if need be. With huge spike in cases in most cities even now, I don't expect normalcy from 1 June," said Melvin Joseph, founder, Finvin Financial Planners, a financial planning firm.

Source: https://www.livemint.com